Following is the speech by the Secretary for Commerce and Economic Development, Mrs Rita Lau, at the signing ceremony of the Hong Kong-Australia Memorandum of Understanding (MOU) on Co-operation in Wine-related Businesses today (April 16):

Financial Secretary, Minister Burke, ladies and gentlemen,

It is a pleasure to be here today to seal this co-operation agreement with one of the world's great wine producing countries, Australia. I especially welcome Mr Tony Burke – Australia's Minister for Agriculture, Fisheries and Forestry. Thank you Mr Burke for making a special trip to Hong Kong for this important signing ceremony.

I am also pleased to see a number of prominent leaders and figures in the wine industry here for this landmark occasion.

Business Response

Since the Financial Secretary exempted duties on wine in his Budget last February, we have made significant strides in developing Hong Kong into a regional wine trading and distribution hub.

Wine imports in 2008 grew to $2.9 billion, or an increase of 80% compared to 2007.

At the same time, companies are expanding their storage facilities and we have hosted two major international wine fairs as well as quite a number of wine auctions. Training institutions are also strengthening their wine-related courses.

To facilitate the further development of wine-related businesses, we have simplified customs procedures, stepped up promotions and enhanced anti-counterfeiting activities. We have also been looking for heritage sites for commercial uses (including wine-related activities).

MOU with Australia

The signing of a Memorandum of Understanding (MOU) with Australia represents another key step for us. This is our first MOU to be signed with the New World wine countries. Australia is already our second largest supplier of wine, accounting for 19% of our total wine imports by volume. Our wine imports from Australia amounted to $255 million in 2008, representing a year-on-year increase of 28%.

Our MOU with Australia is an extensive one, covering a wide range of areas, including promoting wine trading, investment, wine-related tourism, wine education and appreciation, and the fight against counterfeits and smuggling.

Our co-operation also embraces new areas such as auctions, storage and certification as well as the possible establishment of a wine centre similar to the one in Adelaide.

Australia has a wine centre in Adelaide which is designed for various wine-related uses, such as exhibition, caf and dining, wine appreciation and education, conference and functions. If any industry players are interested in setting up a similar facility in Hong Kong, I am sure our friends from Australia will only be too ready to share their experience and expertise. The Government will be putting up the heritage site of Haw Par Mansion for commercial use, including wine-related activities. The industry may consider using this unique venue for multiple wine-related purposes like the Australian wine centre.

Since we exempted wine duty last year, no less than nine wine auctions have been held in the city, including sales by some of the biggest names in the business. The most recent wine auction held earlier this month fetched total sales of about $50 million. That is impressive, especially given the current economic climate. We hope to see more Australian firms taking advantage of the new opportunities here by staging auctions or providing wine-related storage facilities. Our inward investment arm, InvestHK stands ready to offer any assistance required.

Of course, Australian companies have a long history of doing business in Hong Kong. Low taxes, the rule of law, high-quality services and global connectivity are among our city's business-friendly credentials.

As with other commodities, Hong Kong maintains a simple regulatory regime for wine. Our MOU also supports greater information-sharing between Hong Kong and Australia, providing a more open and certain environment for traders.

Similarly, Hong Kong has a very simple and basic requirement on wine certification, which is normally only required when there are health and safety concerns. Australia has agreed with us to keep these requirements to the minimum to reduce trade barriers. This facilitates wine trading between the two places.

Key Wine-related Events

Ladies and gentlemen, this year will be another exciting one for the wine industry in Hong Kong. From late October to early November, we will stage our first Wine and Dine Festival which will feature wines from around the world, and no doubt including Australia. And in November, the Trade Development Council will hold its second 'home-grown' international wine exhibition. Australian companies accounted for the largest number of participant at the event last year, and we look forward to another strong representation from Australia again this time.

The signing of this MOU will elevate our bilateral co-operation to a new level. I look forward to seeing the benefits it will bring to wine-related business activities in Australia and Hong Kong.